Obama makes TPP push in SOTU

OBAMA MAKES TPP PUSH IN SOTU: President Barack Obama during his State of the Union speech Tuesday night made his expected appeal to Congress to approve the Trans-Pacific Partnership, arguing it would open overseas markets to more U.S. goods and help the United States compete against China in the global economy.

Story Continued Below

"With TPP, China doesn't set the rules in that region, we do," Obama said in his speech. "You want to show our strength in this century? Approve this agreement. Give us the tools to enforce it."

The remarks were met with scattered applause, prompting House Speaker Paul Ryan to look around curiously at the audience to identify the source. Meanwhile, Senate Finance Committee Orrin Hatch objected to what he described as “partisan” tone of the overall speech and did not respond directly to Obama’s TPP appeal.

Obama’s mention of enforcement was likely a subtle reference to customs legislation that contains new provisions to speed up action on duty evasion complaints and a new $15 million annual enforcement fund. The Senate has yet to pass that bill because of disagreement over an unrelated Internet tax issue.

THUNE SAYS TPP ON ‘LIFE SUPPORT’: In bad news for the president, Sen. John Thune, a member of the Senate Finance Committee as well as Republican leadership, told Fox News that TPP is “on life support.” “It's less than 50-50 it gets done this year,” he said after the speech.

CUBA ALSO ON THE AGENDA: Obama also used the speech to reiterate his desire to see Congress lift the five-decade-old embargo on Cuba. The White House has already taken steps to loosen the embargo, but the president called on Congress to finish the job.

"Fifty years of isolating Cuba had failed to promote democracy, setting us back in Latin America,” he said. “That's why we restored diplomatic relations, opened the door to travel and commerce, and positioned ourselves to improve the lives of the Cuban people. You want to consolidate our leadership and credibility in the hemisphere? Recognize that the Cold War is over. Lift the embargo."

Verdict: Not exactly. Energy Information Administration data shows that U.S. imports of foreign oil and petroleum products such as gasoline and diesel fuel totaled 339 million barrels in February 2009, when Congress passed Obama's economic recovery plan. By October 2015, the most recent month of EIA data, imports topped 272 million barrels — representing a decrease of nearly 20 percent.

But the White House tweeted during Obama's speech that his remark referred to net imports, which dropped by more than 55 percent on a monthly basis between early 2009 and October thanks to skyrocketing exports of U.S. energy. During last month's debate over the omnibus spending bill, Obama had resisted a Republican push to roll back restrictions on oil exports, but agreed to sign the bipartisan bill.

U.S. imports from the OPEC also fell by a similarly high share, according to EIA, from an Obama administration peak of about 176 million barrels in January 2009 to less than 79 million barrels in January 2015. That's a decrease of more than 55 percent.

AFL-CIO, LIBERAL DEMS TROUNCE OBAMA ON TRADE: The AFL-CIO didn’t miss a beat maligning Obama’s TPP pitch, arguing that the deal will undermine his legacy. “Working people have supported the president through many difficult fights,” AFL-CIO Trade Policy Specialist Celeste Drake said in a statement. “We deserve better and will fight to defeat the TPP.”

Trade skeptical lawmakers also criticized Obama for pushing a trade deal while also making an appeal for greater social welfare.

"He's talking about income inequality, the high cost of education, economic security, health care, Social Security — it's all great stuff,” said Rep. Peter DeFazio (D-Ore.). “But the number one thing he's pushing right now on Capitol Hill is the Trans-Pacific Partnership, and that will be detrimental to all of these concerns."

NEW ZEALAND OFFERING TO HOST TPP SIGNING IN EARLY FEB.: New Zealand has offered to host an early February signing ceremony in Auckland for countries in TPP, a spokeswoman for the country’s Ministry of Foreign Affairs and Trade, confirmed.

“Each country has a different process in relation to domestic requirements to be able to sign a trade agreement,” she said in a statement. “For this reason, specific arrangements have yet to be finalized pending confirmation from TPP partners that they have completed their domestic procedures in order to sign the agreement.”

Chilean Vice Minister for Trade Andres Rebolledo said earlier this month that the signing ceremony would take place Feb. 4, according to press reports. U.S. Trade Representative Michael Froman said a “firm” date hadn’t been set.

TUFTS STUDY POURS COLD WATER ON TPP RHETORIC: A new report from Tufts University argues TPP will lead to significant job losses and rising inequality, projecting a loss of 770,000 jobs in all participating countries “with the largest losses occurring in the United States.” It also predicts decreased growth and employment in non-TPP nations. Click here for the report: http://bit.ly/1PV94j0.

PARLIAMENTARY GROUP: SLOW DOWN ON CHINA’S TRADE STATUS: With leaders of the European Commission scheduled to discuss granting China “market economy” status today, the European Parliament’s Socialists and Democrats group is weighing in against a hasty move, POLITICO Pro’s Europe Brief reports. Upgrading China’s trade status would make it harder for the European Union to win antidumping cases against Beijing.

The president of the Socialists and Democrats Group, Gianni Pittella, released a statement Tuesday saying the group is “convinced that automatically granting Market Economy Status to China would be premature” and calling for a “full and formal impact assessment before taking any decision in this regard.”

Also, the editorial board of the Hong Kong-based South China Morning Post, recently bought by Alibaba, weighed in favor of the EU granting China the new status. Read more: http://bit.ly/1mUKB48.

HOUSE MEMBERS URGE FINANCIAL SERVICES FIX IN TPP, FUTURE DEALS: A bipartisan group of 63 House members, including Ways and Means Trade Subcommittee Chairman Dave Reichert, wants senior administration officials to “use all available measures” to address what they view as a major shortcoming in the financial services provisions of TPP.

The deal includes rules prohibiting countries from preventing the free flow of data or forcing local storage of data, but those provisions in the deal’s e-commerce chapter don’t cover financial data.

“Omission of these disciplines in the Trans-Pacific Partnership is a missed opportunity to ensure that all U.S. companies benefit from strong rules prohibiting localization requirements,” the lawmakers wrote in a letter sent Tuesday. “We note that such disciplines can be included in trade agreements while maintaining the ability of U.S. regulators to protect consumers through prudential regulation.”

The lawmakers also advocated for a “single approach” on the issue that would apply to the pending Transatlantic Trade and Investment Partnership, the U.S.-China bilateral investment treaty and the Trade in Services Agreement. Read the letter here: http://1.usa.gov/1Q3r2Sm.

BIZ GROUPS WARN ABOUT IRAN SANCTIONS BILL: The National Foreign Trade Council and its sanctions-fighting affiliate, USA Engage, are urging Speaker Ryan to oppose a pending sanctions bill against Iran, the Iran Terror Finance Transparency Act. Obama has already vowed to veto the bill, fearing it could kill a carefully crafted agreement in which Iran promised to wind down its nuclear program in exchange for multilateral sanctions being rescinded. The business groups also warn that passing the legislation could “open a gulf” between the U.S. and the five other world powers that signed the deal. Click here to read the full letter, posted late Tuesday: http://bit.ly/1RKtzAR.

Meanwhile, the House responded on Tuesday to North Korea’s latest nuclear weapon test by voting 418-2 to strengthen sanctions against the communist country and authorize new sanctions on any foreign and domestic individuals and entities involved in illegal transactions with Pyongyang. Senate Mitch McConnell said Tuesday that he expected the Senate to pass North Korea sanctions legislation, once it comes out of the Foreign Relations Committee.

GOOGLE SNARES ATKINSON FOR GLOBAL POLICY JOB: Caroline Atkinson, who stepped down as deputy national security adviser for international economics last month, will head to Google to serve as the company’s new head of global public policy, POLITICO Pro’s Tony Romm reports. She will start her new job at Google in March, based out of the company's Washington office.

The biggest challenge on her plate is the European Union, where Google fought for years against accusations that it manipulates search results to the detriment of its competitors — only to have Margrethe Vestager, the EU's new competition commissioner, file formal charges in April. Read the full story here: http://politico.pro/1UMV5Nf.

SOUTH AFRICA ‘CONFIDENT’ IT WILL FOLLOW THROUGH ON MEAT DEAL: South Africa says it’s confident that it will begin accepting U.S. chicken once the first shipments arrive in the next few weeks, making it unnecessary for Obama to proceed with suspending some of the country’s tariff benefits under the African Growth and Opportunity Act. The president this week announced he would suspend tariff-free treatment on South African agricultural exports to the U.S. on March 15, a move that pushes the country to follow through on a deal to remove barriers to U.S. poultry, pork and beef.

“South Africa’s Departments of Trade and Industry and the Department of Agriculture, Forestry and Fisheries are working closely with the local US Embassy, local importers and US exporters, to facilitate the first shipments of US poultry under the agreed Quota for US bone-in-chicken pieces,” South Africa’s Department of Trade and Industry said in a statement on Tuesday.

The South African government said it would make a first-come, first-served 16,250 metric ton quota available between March 15 and March 31. The agreed-upon 65,000 metric ton tariff-free quota will be opened starting April 1 and will only be accessible to importers that receive an allocation from South Africa’s ag department.

Join NFL Network and POLITICO for a screening of NFL Film's production of America's Game and the Iran Hostage Crisis. The screening will be followed by a panel conversation discussing the film and current events featuring Director and Executive Producer Tate Donovan, American reporter in Iran during the hostage crisis Alex Paen and U.S. Marine held hostage in Iran during the crisis Rocky Sickmann. Thursday, January 14, 6-8 p.m., The Newseum. RSVP:http://bit.ly/1ZQv5UM.

INTERNATIONAL OVERNIGHT

The Malaysian Parliament will meet for a special session on Jan. 26 to begin a heated debate over TPP, The Star reports: http://bit.ly/1RkWQn1

A Welsh political party is gaining support in its request to give Wales a veto before the United Kingdom signs up to the U.S.-EU trade deal, Wales Online reports: http://bit.ly/22YID2Z

China’s trade declined in December but not as much as data reported from November, the AP reports: http://dailym.ai/1J1XyDb

Authors:

About The Author

Adam Behsudi is a trade reporter for POLITICO Pro.

Prior to joining POLITICO, he covered international trade policy for Inside U.S. Trade, where he tracked down the latest news on the Trans-Pacific Partnership from exotic locales such as Auckland, New Zealand; Kota Kinabalu, Malaysia; and Leesburg, Va.

Before writing about anti-dumping, export controls and other trade subjects, Behsudi covered city hall for the Frederick News-Post. He got his start in journalism chasing crooked sheriffs and other crime-related news in the mountains of western North Carolina for the Asheville Citizen-Times.

Behsudi earned his bachelor’s degree in 2005 from the University of Missouri. With the hope that journalism could return as a growth industry within his lifetime, he earned a master’s degree in interactive journalism from American University in 2010.